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German households to be hit by higher electricity surcharge

Germans will have to dig a little deeper in their pockets to pay their electricity bills next year. The reason behind the prices is a renewed increase in a surcharge to co-finance the country's shift to renewables.

Electricity meter in a German household

A special German levy on electricity consumers would rise to a record level of 6.24 eurocents ($0.085) per kilowatt hour, the TransnetBW grid operator announced Tuesday. It said the levy would go up from 5.277 eurocents at present.

The surcharge has helped finance the higher statutory rate paid for energy produced by wind and solar farms, biogas plants and hydropower facilities.

The surcharge goes back to a 2011 decision by the German government under Chancellor Angela Merkel to phase out nuclear power by 2022 and an accompanying goal to generate half of the country's electricity from renewable by 2030.

But the move has turned out to be costly for consumers, with German households paying some of the highest electricity prices in the world. Germany's energy-intensive companies have been granted exemptions from the surcharge amid fears they could not compete with foreign firms paying far less for power.

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Germany's high electricity prices

Germany's high electricity prices

The renewed levy increase means households will have to pay between 60 and 100 euros more for electricity next year.

But renewable energy lobby associations have warned citizens should not be fooled into believing that they would have to pay so much more because of new technology costs in the renewable sector.

"On the contrary, costs have come down considerably because of vast technological advances," said BSW Solar chief Carsten Körnig.

He referred to scientific estimates according to which 70 percent of the surcharge hike was attributed not to the costs involved in building solar and wind farms, but rather to the fact that sinking prices at the electricity exchange were not being passed on to households and that ordinary Germans had to shoulder the burden of companies which did not have to pay the levy at all.